Officials of Storer Cable Communications are seeking a buyer for their 2-year-old cable television franchise in Leesburg after losing a bid for the surrounding Loudoun County franchise earlier this year.
Winfield M. Kelly, Storer's vice president for regional marketing and franchising in the Washington area has offered the Leesburg franchise to Cable Communications Corporation, the company that won the Loudoun franchise, for an undisclosed price. CCC officials say they are studying the offer.
"The system is large and sophisticated, and by itself is not making any money," said Kelly. "That is why we tried so hard to win the Loudoun County franchise and now why we want to sell."
The Leesburg system, which was built to support a county-wide cable network, is expected to lose nearly half a million dollars this year and Storer officials say they do not see any relief in the near future.
"It interests us but would have to be offered at a very good price to be an exciting prospect," said Harold Miller, attorney for CCC. "The system has lost a lot of money recently and we do not know yet what it is worth."
Of the 3,000 homes in Leesburg, 60 percent have subscribed to Storer cable television, a figure that Ward L. Bodner, Storer's system general manager, said was below projections. Bodner also said they have requested a rate increase from the town of Leesburg to cover some of their operating losses.
If that increase is granted, basic service will rise in price by 42 percent, from $7.00 to $9.95, and other services will also rise. Leesburg officials said the Town Council will consider the increase in August.
Kelly said other companies had expressed an interest in the Leesburg franchise, but that he thought Storer's best chance to sell the franchise was CCC.
"Clearly, it would make sense for the same company to operate it as had the county franchise," said Kelly. "The industry is going through a period right now when it needs capital, and there aren't many people interested in purchasing companies with large losses anymore." Kelly said that if no buyer is found, Storer would continue to meet its obligations for the length of its 15-year franchise.
CCC officials said that, while they still need to make final arrangements on their financing for the Loudoun system, they were sure they could find financing if they chose to buy the Leesburg system. They said they would make that decision "very soon."
Leesburg town officials said that the sale of the franchise would depend on approval from the Town Council and that the sale would not change the terms of the existing franchise agreement.